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Launched in October 2010 Instagram quickly became the hottest photo-sharing application on the Internet for two reasons - it was available on iPhones only, and it was good. So good in fact that Facebook simply gave up trying to combat Instagram and bought the company outright for USD 1 billion after 18 months of operation.
Instagram has become part of an Internet-marketing specialist's toolkit. It has a great reach, allows for key social/viral content sharing with searchable hashtags and integration with Facebook, Twitter, and Foursquare streams, and it is still dominated by iPhone users - the most valuable consumers of all.

But now Instagram has revealed an updated Terms of Use document and Instagram users do not like what they see.

Instagram said today that it has the perpetual right to sell users' photographs without payment or notification, a dramatic policy shift that quickly sparked a public outcry.

The new intellectual property policy, which takes effect on January 16, comes three months after Facebook completed its acquisition of the popular photo-sharing site. Unless Instagram users delete their accounts before the January deadline, they cannot opt out.

Under the new policy, Facebook claims the perpetual right to license all public Instagram photos to companies or any other organization, including for advertising purposes, which would effectively transform the Web site into the world's largest stock photo agency. One irked Twitter user quipped that "Instagram is now the new iStockPhoto, except they won't have to pay youanything to use your images."

"It's asking people to agree to unspecified future commercial use of their photos," says Kurt Opsahl, a senior staff attorney at the Electronic Frontier Foundation. "That makes it challenging for someone to give informed consent to that deal."

That means that a hotel in Hawaii, for instance, could write a check to Facebook to license photos taken at its resort and use them on its Web site, in TV ads, in glossy brochures, and so on -- without paying any money to the Instagram user who took the photo. The language would include not only photos of picturesque sunsets on Waikiki, but also images of young children frolicking on the beach, a result that parents might not expect, and which could trigger state privacy laws.

Starting next month, anything you post to Instagram can be used by Facebook -- and Facebook's partners -- in perpetuity, for any purpose, for no compensation, and without your knowledge. If you've been using Instagram as a marketing channel or as a device to generate buzz for a client campaign (as we at CCM have done many times) that means your work will be out of your control as of January 2013. The only way to get around these new Terms of Use is to delete your account.